Gold Mining Stocks Fall Together With The Price Of Gold
Gold mining stocks found themselves under strong pressure today as gold made an attempt to settle below $1675 before rebounding towards $1750.
Gold gained strong downside momentum and managed to move from the $1800 level to the test of the support at $1675 in just two trading sessions. Not surprisingly, gold mining stocks also moved lower.
Leading gold mining stocks like Barrick Gold, Newmont Mining, Kinross Gold and Agnico Eagle Mines declined to multi-week lows and have decent chances to continue the downside trend if gold fails to rebound from current levels.
What’s Next For Gold Mining Stocks?
The recent move in the gold market may have a significant impact on gold mining stocks which are almost always sensitive to the dynamics of the gold price.
Last week, gold mining stocks made an attempt to get out of the recent trading and move higher as gold price was stable near the key $1800 level. Now, gold mining stocks may gain material downside momentum if gold fails to find support near the important $1750 level.
It should be noted that several recent developments in individual companies can also hurt market mood. AngloGold Ashanti has recently announced that the company’s Obuasi mine may not resume production in 2021 after an incident in May. IAMGOLD has cut production guidance and increased cost estimates for Cote project.
Traders should also keep an eye on the latest developments in Treasury markets as yields keep moving higher from recent lows which may put additional pressure on gold and gold mining stocks.
The near-term direction of gold mining stocks will depend on whether traders are ready to “catch the falling knife” and buy gold mining stocks near multi-week lows. If current levels do not hold, gold mining stocks may gain serious downside momentum.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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